Method and system for managing distributor information

ABSTRACT

An embodiment of the invention provides a system that enables financial services companies to manage and track information about a sales force. The system includes components for managing distributors information, for validating and tracking licenses and credentials, for creating customized contracts, and for maintaining compensation structures. The system allows for configuring compensations, providing financial services companies a toolkit for creating and modeling their complex commission schedules used to compensate their sales force. The system also provides modeling tools for agreements and contracts between a financial services company or provider and the distributors who sell products. The system has a multi-component architecture comprising multiple modules, multiple data processing engines, a backbone and multiple data sources. The processing modules carry out information processing using one or more data processing engines. The data processing provides the tools to fetch data from the databases and process it.

FIELD OF THE INVENTION

This invention relates to the field of computer technology. Morespecifically, the invention relates to a method and system for managingdistributor information.

Portions of the disclosure of this patent document contain material thatis subject to copyright protection. The copyright owner has no objectionto the facsimile reproduction by anyone of the patent document or thepatent disclosure as it appears in the Patent and Trademark Office fileor records, but otherwise reserves all copyrights whatsoever.

BACKGROUND

Managing sales and distribution channels has become a difficult task intoday's business environment where it is necessary to quickly and fairlyadminister incentives for salespeople and distribution channel partnerswhile coping with regulatory issues. To keep revenues growing and keepup with customer demands, financial services providers have to movequickly even when regulation, competition and new sales distributionchannels inhibit growth. Management is expected to provide newopportunities for improved revenues and margins, while providingcustomers with better, faster information and services.

The distribution channel model within the financial services industry isvery complex. Products are sold across multiple distribution channelsand the workforce is very fluid, with individual distributors workingfor multiple companies and engaging in multiple agreements with serviceproviders. There are regulatory constraints on the sales force in thatall distributors who sell products must be licensed and appointed, orauthorized, to sell those products. Financial services companies musttrack all of this information about their sales force, maintain ahistory of all of this information, provide incentive based compensationto their sales force, and calculate their compensation based uponnumerous variables. Consequently, any plan for distribution channelmanagement must consider the number of channels, the number ofdistributors, compensation complexity, regulatory and licensingrequirements and the number and types of products that will be sold.

Financial service companies are being driven by increased competition toconsider the use of independent agents in place of captive sales staff.Firms may wish to enhance and reward cross distribution channelinteractions. They must be able to enhance distributor reporting andcommunication and effectively manage independent brokers and captivesales staff. They must reduce the time required to market new productsand implement new compensation plans and differentiate themselves basedon services offered to customers. In addition, they must be able torapidly integrate new distribution channel acquisitions and growdistribution capabilities, while reducing administration costs.

Cost avoidance is essential as mergers and acquisitions have led to manydisparate systems, some of which are antiquated. Firms must reduceimplementation time for new products and compensation plans on theseantiquated systems and reduce the potential for overpayment. The goalmust be a reduction in the overall cost of administration. Accordingly,these companies must interact with the producers (of sales) usingpreferred methods and quickly model new and creative compensation plans,while consolidating compensation administration systems.

In order to provide sales representatives with an incentive to sell asmuch as possible, or to sell more of a desired product or products atcertain prices, sales organizations create incentive plans wherecommissions are provided or offered to the sales representatives whenspecific sales goals or targets are achieved during particular period oftime. In addition, an incentive plan may apportion credit to everyone ona sales representative's sales team, to the representative's manager, orsomeone other than the sales representative himself. Salesrepresentatives typically receive compensation based on a salary, thehours worked, and/or on the goods or services sold. When basingcompensation on transactions, specifically on the goods or servicessold, sales representatives receive a commission that can be based onprofits, net sales, the number of products sold, or some other variable.Other primary compensation includes gross dealer concessions. Secondarycompensation includes expense allowances, persistency bonuses andoverrides that can be allocated among sales teams and accumulated overtime if desired.

Sales compensation for direct and indirect channels can be one of themost effective levers for aligning sales performance with businessgoals. Unfortunately, designing and administering effective incentiveprograms is a difficult management challenge. The management of abusiness can spend a great deal of time and money in developingincentive plans. In the prior art, the creation and distribution ofincentive plans is a slow process that is prone to error. It can takemonths to implement a new compensation plan, and dependencies oncomputer software can frustrate sales managers who want to make evensimple changes. Moreover, a lack of measurement tools can make itimpossible to develop a “closed loop”, continuous improvement process.Businesses must be able to design, process, and communicatesophisticated incentive programs that drive revenue growth across allsales channels. Businesses need to streamline the administration ofquotas, territories, and commissions, and also require tools to measureand improve the effectiveness of incentive programs. This would greatlysimplify the management challenge of aligning tactical businessperformance with strategic objectives, making it possible to react morequickly and effectively to changes in market and competitive conditions.

Quotas are a necessary component of most sales compensation plans, yetthey are notoriously difficult to administer, especially when theyinvolve multiple hierarchies. Not only is it easy to introduce problemslike double counting and under- or over-payment, but also changestypically require long turnaround times while they are implemented bychanges in computer software. The management of sales quotas isdifficult and there is a need to be able to manage them easily andaccurately, allowing business users to assign quotas by territory orposition and across multiple hierarchies. Managers also require acapability to accurately track sales results and forecast futureperformance. Needed elements include the ability to tie quotas betweenpositions and sales teams or positions and territories, make salesprojections, a provision for quick and easy quota setting and editing,and a simple interface for use from the field.

Managing sales territories involves analyzing past results, assigningterritories, and forecasting future sales performance. For mostorganizations, it is a difficult and time-consuming process with theresult that it is commonly only undertaken once a year. Unfortunately,market conditions change continuously, making it practically impossibleto keep sales territories aligned with business needs for more than ashort period of time. A more automated process for territory managementis needed to allow large sales organizations to keep up with the market.

Another need of firms in financial services is an ability to managesales producer payment accounts by defining multiple accounts perrepresentative, setting up payment rules for each account and proceduresfor adjustments. Loan issuance against customer accounts must also bemanaged. Loan and repayment schedules, and appropriate records, must bemaintained. As a part of this activity, it is necessary to trackeligible compensation against parameters established for the loan and tobe able to track collection of the loan and initiate charge-back andfrom the producer if appropriate.

In the area of distributor administration, firms also would like tomanage a shared repository for all producer information, includingpersonal information, professional information and preferences. There isa need to provide a view of the roles played by individuals with anorganization, and active selling agreements and reporting relationships.Firms would like a centralized distributor repository in order to beable to view, report and compensate producer relationships individuallyand holistically. In addition, they must reduce errors ormiscalculations leading to overpayment. At the same time, these firmsmust assist new agent distribution channels in learning how to sell newtypes of products and create new distribution capabilities for existingproducts.

Credential management is a critical issue for many firms. They musttrack professional accreditation including licenses, appointments,National Association of Securities Dealers (NASD) registration andcontinuing education requirements for the maintenance of theseprofessional accreditations to ensure that they are represented byappropriately credentialed representatives. This need is made more acuteby constantly changing government rules and regulations, as well as bydifferent regulations imposed by the different jurisdictions in which afirm operates. Firms must determine when renewal processing is requiredand manage new and renewal application processes to ensure regulatorycompliance in every jurisdiction. A further problem is presented byrepresentatives who may move from jurisdiction to jurisdiction in thecourse of their representation of a firm. Further, there is substantialturnover in representation resulting in a continuing need to ascertainthe credentials of new representatives as well as to maintain contactwith former representatives in the event that issues arise from theirformer representation.

In order to appropriately manage their representatives, firms must alsobe able to create customized contracts and selling agreements bycombining reusable compensation components and personalizing agreementtemplates to fit individual producers. A selling contract defines ahierarchy of sales people that can sell products under that contract andit defines what products can be sold under that agreement. The sellingcontract also specifies commission schedules and identifies which salespeople participate under a particular commission schedule. As multipleversions of such agreements may come into use over time, a procedure isneeded to allow multiple users to maintain agreements throughversioning, or version control, and a method must be provided to managethe approval process for agreement components and templates.

Any distribution management channel solution, in order to be useful,must have a capability for error correction, including manuallyinputting and adjusting all transaction information, making retroactiveadjustments and viewing and managing ledger items. Other features thatare desirable include the ability to cancel and rerun transactions.

Many financial services firms would like to be able to communicatedistribution channel management information over the Internet so thatproducers can view the state of their relationship with a firm,including profile information, licenses, appointments, productinformation, contract and compensation information. Firms would alsolike to be able to perform modeling and “what if” analysis and have theability to capture historical data to make strategic decisions about theeffectiveness of future plans. A set of Web-based incentive managementproducts that can be deployed to practically any sales or distributionchannel would be useful. Such tools could greatly simplify the burden ofdesigning, forecasting, launching, measuring, and refining incentivesprograms.

Computer software is necessary to implement the solution to theseproblems and fulfill the perceived needs just described. Such softwarecommonly utilizes multiple related functions and data structures. Toencapsulate these related functions and data structures, the softwareoften utilizes a standard object oriented programming (OOP) languageapproach.

In conclusion, there is a need for a solution, implemented on a computerin an object oriented programming environment, that manages thecontracts between the manufacturers of a product, which may includefinancial services, and the distributors of their product in an industrywhere there is multiple channel selling, a fluid workforce, andregulatory constraints. This solution should track information, such ascontact points, payment methods, and the organizational hierarchies, onall parties in the system. It must manage regulatory information andensure that distributors are licensed and appointed to sell the productsmanufactured, or distributed, by the provider. In addition, the solutionmust allow for compensation configuration and provide financial servicescompanies with a toolkit for creating and modeling their complexcommission schedules used to compensate their sales forces. This shouldinclude a provision for charge-back of commissions if appropriate. Also,the solution must model contracts between the financial servicescompany, or provider, and the distributors who sell the products. Thesolution must calculate compensation for all distributors and shouldallow for access through the Internet.

SUMMARY OF THE INVENTION

The invention provides a method and system for managing contractsbetween manufactures of a product and the distributors of their productin an industry comprising multiple channel selling, a fluid workforce,and regulatory constraints. An embodiment of the invention provides asystem that enables financial services companies to track informationabout their sales force, maintain a history of all of the information,provide incentive based compensation to their sales force, and calculatetheir compensation based upon numerous variables. The system referred tohereinafter as Distributor Management System Suite (DMSS) comprises asuite of applications that provide tracking information, such as contactpoints, payment methods, and organizational hierarchies on all partiesin the system, managing regulatory information and ensuring thatdistributors are licensed and appointed to sell the productsmanufactured by the provider. The DMSS provides financial servicesinstitutions with the means to maintain distributor records, contracts,and commissions. The DMSS includes components for managing informationrelated to distributors, validating and tracking licenses, creatingcustomized contracts, and maintaining compensation structures. Theinformation stored in the DMSS database includes contract components andrules, distributor financial information, bonus schedules, and licenseand appointment data.

In an embodiment of the invention, the DMSS allows for configuringcompensations, providing financial services companies a toolkit forcreating and modeling their complex commission schedules used tocompensate their sales force. The DMSS provides modeling capabilitiesfor agreements and contracts between a financial services company orprovider and the distributors who sell products. In an embodiment of theinvention, the DMSS calculates compensations for all distributors,processes payment and manages dept.

In an embodiment of the invention, the DMSS comprises several componentscomprising management modules, a backbone, one or more data processingengines, databases, and storage management components. The backboneallows for data exchange between components of the DMSS comprisingmodule-to-engine and engine-to-database data exchange.

In an embodiment of the invention, the DMSS comprises data processingengines. These system components are designed to draw information fromthe DMSS databases, process the information, and store the result in adatabase for further use by the DMSS modules and engines.

In an embodiment of the invention, the DMSS is composed of severalmodules comprising a distributor administration module, a license andappointment module, a selling agreements module, a debt managementmodule, and a payment module. These modules interact with the backboneand engines to maintain relationships between financial servicesinstitutions and their distributors.

DESCRIPTION OF THE DRAWINGS

FIG. 1 shows a block diagram representing an embodiment of a system thatutilizes the Distributor Management System Suite (DMSS).

FIG. 2 comprises a flowchart showing the process of communicatingbetween modules, the data processing engine, the DMSS backbone and thedatabases in an embodiment of the invention.

FIG. 3 show a block diagram representing an example of interactionsoccurring within DMSS modules and engines in an embodiment of theinvention.

FIG. 4 shows a hardware environment for executing one or more aspects ofthe invention.

DETAILED DESCRIPTION

The invention provides a method and system for managing distributorinformation. In the following description, numerous specific details areset forth in order to provide a more thorough understanding of theinvention. It will be apparent, however, to one skilled in the art, thatthe invention may be practiced without these specific details. In otherinstances, well-known features have not been described in detail inorder to avoid unnecessarily obscuring the invention.

System Overview:

An embodiment of the invention comprises an extensible method formanaging relationships between institutions (e.g.,suppliers/manufacturers) of a product or service and the distributors oftheir product. Aspects of the invention are targeted at industries wherethere is multiple channel selling, a fluid workforce, and regulatoryconstraints upon products sales. For example, systems embodying theinvention provide a way to manage the agreements that financial servicescompanies have with the distributors who sell their products. Thus,organizations such as life insurances companies may utilize embodimentsof the invention to manage the sale and distribution of life insuranceplans in a way that coincides with the regulatory constraints ofgovernment organizations.

Such companies can utilize embodiments of the invention to trackinformation about the company's sales force, maintain a transactionhistory of the information associated with multiple products, provideincentive based compensation to the company's sales force, and calculatesales force compensation based upon numerous variables. For example, thesystem referred to hereinafter as Distributor Management System Suite(DMSS) comprises a suite of applications that provide trackinginformation, such as contact points, payment methods, and organizationalhierarchies on all parties in the system, managing regulatoryinformation and ensuring that distributors are licensed and appointed tosell the products manufactured by the provider.

In one embodiment of the invention, DMSS comprises a suite of multipleengines and modules each configured to provide functionality that helpsmanage the flow of information between distributors and suppliers.Generally, DMSS provides users with a mechanism for managing informationrelated to distributors, validating and tracking licenses, creatingcustomized contracts, and maintaining compensation structures. Toperform such functions the system configured in accordance with oneembodiment of the invention stores information such as contractcomponents and rules, distributor financial information, bonusschedules, and license and appointment data. The engines and modules ofDMSS may, for example, be configured to perform at least the followingfunctions:

-   -   1) Provide financial services institutions with the means to        maintain organization hierarchies associated with parties on the        system (e.g., distributor records), track information such as        contracts, and payment methods (e.g. how a distributor is paid).    -   2) Manage regulatory information and ensures that distributors        are licensed and appointed to sell the products manufactured by        the provider.    -   3) Perform compensation configuration. It provides financial        services companies a toolkit for creating and modeling their        complex commission schedules used to compensate their sales        force. For example, the system may calculate compensation for        all distributors by building on top of a commission engine and        using the engine, the commission models, and the agreement        models to calculate the compensation for all of its sales force.    -   4) Models agreements or contracts between the financial services        company or provider and the distributors who sell the products.        These agreements are termed ‘Selling Agreements’. A selling        agreement defines a hierarchy of sales people that can sell        products under that contract, it defines what products can be        sold in that agreement, it defines what commission schedules can        be used in that agreement, and it defines which sales people        participate in which commission schedule. The DMSS may utilize        the terms defined in selling agreements to calculate        compensations for all distributors.    -   5) Managing information related to distributors, validating and        tracking licenses, creating customized contracts, and        maintaining compensation structures. The information stored in        the DMSS database comprises information such as contract        components and rules, distributor financial information, bonus        schedules, and license and appointment data.    -   6) Manages payment and debt to distributors/sales        representatives (e.g., net-pay and debt management).

In accordance with one embodiment of the invention DMSS is built on topof a commission engine configured to model and calculate commission forthe sales force. A commission engine takes two inputs, a commissionmodel and a set of transactions, and generates ledger items (thatcorrespond to payments) as output. Each transaction represents aphysical sales transaction, such as distributor selling a life insurancepolicy. The commission model represents two critical pieces of data: thesales team hierarchy and the commission schedules. The sales teamhierarchy comprises a hierarchy of all sales people that will beresponsible for a transaction. The commission schedules define formulafor translating transactions into ledger items. Commission schedules maybe modeled through quota, bonus, and plan objects. The commission modelutilized in one or more embodiments of the invention is described infurther detail in pending patent application Ser. No. 09/081,857,entitled “Method and Apparatus For Determining Commission”, which inincorporated herein by reference.

DMSS complements the commission engine in that it provides a mechanismfor modeling selling agreements with commission models. In accordancewith one embodiment of the invention, at least one commission modelexists for each selling agreement in DMSS. Agreement hierarchies aremodeled within the sales team hierarchy. The agreement commissionschedules are stored in accordance with one embodiment of the inventionin the commission model's quota, bonus, and plan objects.

The commission schedules used in an agreement are often the same orsimilar across agreements. Therefore, the agreements are put togetherfrom contract kits. A contract kit contains a set of commissionschedules (also referred to as compensation components) that can be usedwithin an agreement. Each compensation component and contract kit isversioned, and the compensation component contains the commissionschedule information needed to generate a complete commission schedulein the commission model. Each agreement is then created from onecontract kit, and when the agreement is created a user can selectedwhich components from the kit to include in the agreement. When a newversion of a component or kit is created, a user can select to cascadethe new version to all the agreements that use it, or to leave theagreement using the old version.

DMS provides additional functionality by allowing dependencies betweenmodels through linked hierarchies and pooling agreements. It is oftencommon for one party to receive credit or rollup from somebody's work ina different agreement. This is accomplished through linked hierarchies.A distributor (Ted) in one agreement (AG1) make be linked to anotherdistributor (Fred) in another agreement (AG2). This allows transactionsfor Fred and all of his descendants to also be credited to Ted.

It is also common for multiple parties to want to share work acrossagreements. For example, one may wish to use one quota to calculatequalification on a quota level, and another quota to calculate payout.In this example, one would want several parties performance tocontribute to the qualification quota, even parties in differentagreements. Pooling agreements provide this functionality, by poolingwork from different agreement participants from potentially differentagreements into one quota. An extensible object model in accordance withone embodiment of the invention provides a framework for representingsuch agreements.

System Components:

FIG. 1 shows a block diagram representing an embodiment of a system thatutilizes the Distributor Management System Suite (DMSS) 105. As shown inFIG. 1, the DMSS comprises management modules 110, a backbone 120allowing data exchange between applications and databases, and betweenapplications, a commission engine 125, a number of additional dataprocessing engines 140, and data storage and storage managementcomponents 130. The DMSS is also configured to allow for the addition ofmore applications and plugins 110 to provide additional services.

In an embodiment of the invention, the DMS comprises several modules andapplications. In this example, the system is used by financialorganizations to manage sales agreements, distributor credentials, andsales compensation. However, the reader should note that the systemembodying the invention is also applicable outside of the financialservices industry and that the term financial organization is utilizedfor illustrative purpose only. The invention is not limited solely tothe financial services industry, but may be applied to other industries.For example, the system may be utilized in any business environmenthaving a need to determine if individuals associated with a sale areappropriately licensed, compensated. The invention may also be appliedto other business situations were companies must operate pursuant to theterms of an agreement.

DMSS comprises a DMS Database which may exchange data with modules andengines via backbone 120. In accordance with one embodiment of theinvention, backbone 120 comprises an information infrastructure used tointegrate applications 110, engines 140 and 125, and databases 130.Backbone 120 facilitates communication between data resources andmodules, and integration of different computing equipment, includinglocal networks, web interfaces, and back-office systems. Thus, backbone120 provides a mechanism for maintaining data storage and retrieval, inaddition to communicating changes and updates to the other modules.Backbone 120 is configured to retrieve data from the database inresponse to the needs of DMSS modules and engines and transmit that datato its requestor. Backbone 120 provides an extensible framework suitablefor building and integrating applications customized for the needs ofindividual clients. Backbone 120 receives information from the DMSSmodules and acts on it, storing the resulting object or sending it backto the module. As modules perform their tasks and functions, thebackbone communicates changes and updates to the rest of theapplications. Backbone 120 also provides communication between themodules by sharing data and functions. The DMSS and other applications110, engines 140, and databases 130 may execute bi-directional requestsand responses across backbone 120. Backbone 120 is configured toretrieve data from the database in response to the needs of DMSS modulesand engines and transmit that data to its requestor. Backbone 120eliminates some of the need for developing custom code, and allowsdevelopers to integrate new applications without knowing all the otherapplications in the system.

Engines 140 and 125 may be launched by the DMSS modules via the backboneand draw information from the DMSS databases. The engines process theinformation, and store the resulting object in a database or thebackbone for further use by the DMSS modules and engines. A commissionengine 125, configured in accordance with one embodiment of theinvention, utilizes backbone 120 to gather information about agreementsfrom the database. Commission engine 125 may, for example, identifyrelevant data in the database and produce a set of objects. Once theengine has processed all the objects, commission engine 125 can generatepayments based on the agreements.

Workflow process engine 146, operating in accordance with one embodimentof the invention, starts and responds to workflow events received fromthe DMSS modules through backbone 120. Workflow process engine 146completes the desired workflow event and sends that information backthrough backbone 120. In an embodiment of the invention workflow engine146 enables users to create and run one or more business processes. Theprocesses may be created in a formatted data input (e.g. XML or Java)and become objects (business rules) in the backbone. The workflow engine146 enables the flow of information in the DMSS and provides users witha customizable mechanism for creating business processes.

The DMSS may comprise a commerce configuration engine 144 that allowsusers to define and enforce the set of rules governing how contract kitcomponents (e.g., document components and compensation components) arecombined into agreements for each distributor. The internal processesutilized by configuration engine 144 are described in further detail inU.S. Pat. No. 5,825,651, entitled “Method and Apparatus For Maintainingand Configuring System”, which in incorporated herein by reference. Thecommerce configuration engine 144 utilizes the contract kit for creatingagreements between a distributor and a financial services company.

A reporting engine 142 may be added to the DMSS and configured togenerate reports and store such reports in the database. Each componentof an agreement has a corresponding document, generated from reporttemplates, which describes that component. The DMSS may also haveadditional modules comprising a distributor administration module 115, alicense and appointment module 116, a selling agreements module 117, adebt management module 118, and a payment module to which is may bereferred to also as Net Pay module 119. These modules interact withbackbone 120 and engines to maintain relationships between financialservices institutions and their distributors.

In one embodiment of the invention, distributor administration module115 enables a financial services institution to record and track a broadset of information associated with the institution's distributors. Thedistributor information may be stored in a central database and used byall other modules of the DMS suite. Distributor information may comprisepersonal contact information (e.g. address, telephone, facsimile, emailetc.), including information about multiple contact points, informationfrom background checks (e.g. education, previous relationships withfinancial services institutions, personal credentials etc.), financialinformation (e.g. bank address/account information and payment, advance,repayment history etc.), license and appointment information (e.g. stateand product eligibility), including current and historical license andappointment data, information about errors and omissions coverage.

Distributor information may also comprise any other type of informationassociated with the distributor and/or the sales of product on behalf ofthe institution. Distributor administration module 115 may also provideservices for creating and managing distributor database information,setting up organizational entities, such as sales teams, placingindividual distributors in the teams, modifying the distributorinformation, and creating and managing a repository for data aboutselling agreements established between the financial servicesinstitutions and distributors. Also, distributor administration module115 may provide services for defining and managing relationships betweendifferent organizations (e.g. such as the financial services institutionand a distributor or between regional directors and sales offices),identifying and managing calendar-based events associated withdistributors such as selling agreement, licensing, and appointmentrenewals, background check renewals, and errors and omissions coveragerenewals.

A licensing and appointments module 116 may also be integrated into theDMSS and configured to enable financial services institutions to managethe license and appointment credentials for distributors and to validatecompliance with industry regulations. The licensing and appointmentrules enforced by the DMS suite are applied to distributors managed bythe system, whether they are employees of the financial servicesinstitution or employed by an external distributor. However, thelicensing and appointment rules may be selectively enforced in the eventthat a user defines a set of rules defined a decision tree forperforming selective enforcement.

Licensing and appointments module 116 may also provide several servicescomprising defining license/appointment types by company, state, andeither product or product line, determining the license and appointmentrequirements for producers (e.g., distributors or sales representatives)based on their state of operation, the products the producer sells, thekind of compensation paid to such producers and their role, monitoringlicense and appointment information associated with individual producerson a calendar and schedule basis and determine when renewal applicationprocessing is required, managing the license application process forrenewals, updating licenses (e.g. for new products or states). In oneembodiment of the invention, licensing and appointments module 116includes the documentation and workflow for the application approvalprocess providing services comprising managing the appointmentapplication process for both renewals and new appointment requests,including the documentation and workflow for the application approvalprocess, providing license and appointment checking as required (e.g.for sales compensation or processing new business), validating thatlicensing/appointment requirements are met and holding activity untilrequirements are met.

When selling agreements module 117 is integrated into the DMSS inaccordance with one embodiment of the invention, the selling agreementsmodule 117 enables a financial services institution to define and createindividual business contracts with distributors. A selling agreementdefines the scope and terms of the relationship between the partiesinvolved, commission and bonus schedules, and documents describing therelationship. In one embodiment of the invention, each selling agreementdefines a hierarchy of sales people that can sell products under thatcontract, it defines what products can be sold in that agreement, itdefines what commission schedules can be used in that agreement, and itdefines which sales people participate in which commission schedule.Selling agreements are built from pre-defined contract kit componentscustomized during negotiations. For example, a selling agreement may beformulated using contract kits comprised of components such ascompensation components and document components. Each selling agreementis assembled by the system using rules (e.g., a component may berequired, optional, or standard) defining the relationships between eachof the components. Compensation components define the commissionstructure associated with a product to be sold and document componentsprovide other information related to the agreement (e.g., contract termsetc . . . ).

The distributor's performance is measured and commission is paidaccording to the terms of the agreement (e.g., defined in compensationcomponents). In an embodiment of the invention, customizable contractkit components enable a financial services institution to define thecontent of contracts and the processes by which they are administered.The kits detail the rules and documentation required for theadministration of the agreement. A financial services institutiondefines the events that may occur and provides a set of possibleresponses to each event using various contract kit components. Sellingagreements module 117 may use contract kits to perform several taskscomprising: defining agreements that consist of contract components,defining the set of rules governing how contract kit components arecombined into selling agreements for each distributor, managing theapproval process for contract kit components and contract kits prior totheir promotion to active use, activating contract kit components andcontract kits for use, retiring contract kit components from active use,integrating with the commission engine to enable compensationcalculations based upon the parameters set in the selling agreement.

In an embodiment of the invention, DMSS comprises an integrated debtmanagement module 118 which enables a financial services institution tomanage distributor advances and repayments. The debt management moduleenables a user to define and manage the business rules and parametersfor the approval and payment of advances (e.g., via an interface). Auser may make adjustments to advance balances based on actual valuereceived from commission and accelerate repayment schedules ifcommissions are insufficient. The debt management module enables a userto define the rules and parameters associated with advances. The debtmanagement module enables a user to define the following: classes ofdistributors who qualify for advances, qualification criteria foradvances (e.g. the distributor's length of service, sales history, andpast earnings), ratio of advances to projected income, taking intoaccount any outstanding advances, repayment schedule and interest rateto be paid, source of repayment income or the policy the advance is tobe recouped from, whether the amount is a percentage or flat rate,accelerated repayment schedules. For example, if a distributor's incomeprojections fall below repayments, a user may modify the repaymentterms, a user may also perform other activities such as initiatingadvances and repayment schedules, and tracking performance of debts.

The DMSS may also comprise a payment module 119 that enables financialinstitutions to track and calculate payments to distributors. Paymentmodule 119 (also referred to as a net pay module) determines adistributor's net pay by adjusting the party's total earned compensation(calculated by commission engine 125) according to a set of paymentadjustment rules. The commission engine utilized in one embodiment ofthe invention is described in further detail in pending patentapplication Ser. No. 09/081,857, entitled “Method and Apparatus ForDetermining Commission”, which in incorporated herein by reference.These rules can be used to capture repayment schedules for outstandingdebt, and transfer payments to an alternate payee. In accordance withone embodiment of the invention, payment module 119 also allowssplitting up net payments into individual disbursements, directingdifferent parts of compensation to different accounts.

In one embodiment of the invention DMSS may also comprise a user managerapplication 140 which defines and restricts user access and usage of theDMS suite. The system may use role-based access control, where roles aregiven specific permissions to data and entities. Users of the DMS suitehave several levels of usage and control in the application based on thepre-defined roles. A user may customize these roles through theapplication user manager 140. In an embodiment of the invention, aworkbench application 113 is provided to enable users to view and managesales transactions and distributor performance data, and to run the DMSengine.

The DMSS comprises, in addition to modules and engines, a set of userinterfaces 150. User interfaces comprise a browser-based system formanaging the DMSS applications. This browser-based system may beimplemented using any network enabling communication protocols andapplications. For example, the browser-based user interface may includeJava Server Pages, script based common gateway interface or anyapplication capable of accessing the databases and producing intangibledata that can be rendered by a client browser.

Information Types:

In an embodiment of the invention, the DMSS comprises several types datastored in the databases and corresponding modules, and used inmodule-to-module, module-to-engine, and engine-to-engine communication.The system may represent such data in data objects. Compensation dataand compensation rules data objects 132 store information for theagreements module of the DMSS. This data may include contract componentssuch as quota levels, bonus rules, and commission-based rules foreligibility. Distributor data and producer data objects 133 storeinformation about a financial services institution's distributors forthe distributor administration 115 and the other modules of the DMSS.This data includes contact information, background checks, continuingeducation credits, and financial information.

Selling agreements data and selling agreement rules data objects 134provides sharing data with the Agreements module 117 of the DMSS.Information in this database includes rules for contracts betweenfinancial services institutions and distributors, data defining theterms of contracts, and commission and bonus schedules. License data andappointment data objects 135 are used by the license and appointmentsmodule 116 of the DMSS. This data includes license and appointmentcredentials and variations of license and appointment types (such asvariations by state or product). The data is also used to validate thatrequirements for a license are met. Process rules data objects 136contain information relating to the DMSS workflow service. This dataincludes agreement components and business rules and data. Report dataobjects 137 contain report data and agreement components and may shareinformation with the report engine.

System Components Interactions

In an embodiment of the invention, modules perform their tasks andfunctions using the backbone 120. The backbone 120 communicates changesand updates to the rest of the applications. The Backbone also providescommunication between the modules by sharing data and functions. Thebackbone 120 maintains data storage and retrieval, in addition tocommunicating changes and updates to the other modules. The backboneretrieves data from the database in response to requests from DMSSmodules and engines and transmits that data to its requestor.

FIG. 2 is flowchart showing the process of communicating betweenmodules, the data processing engine, the DMSS backbone and the databasesin an embodiment of the invention. In step 220 a request is received bythe DMSS to perform a data processing task. This step involves startingthe modules required to handle the data processing task. The module dataprocessing task may require one or more services provided by specificdata processing engines. The module determines, if a specific engine'sservices are needed in step 230 and may start the designated engine byissuing a request through the backbone in step 240. In one embodiment ofthe invention, the module calls directly to the engine and the engineloads data through the backbone. In either case, the engine may requestthe data necessary for processing the modules request in step 250 thoughthe backbone. The backbone fetches the data from different sources ofdatabases in step 260. The engine processes the modules request in step270 and returns the processing result through the backbone to themodule. The module completes the processing in step 280 and continuesprocessing the data. The backbone updates the databases and othermodules in the DMSS in step 290.

FIG. 3 show a block diagram representing an example of interactionsoccurring within DMSS modules and engines in an embodiment of theinvention. In this example, the selling agreements module 117 of theDMSS, acts through the workbench 113. The workbench 113 startscommission engine 125 by sending a request 310. In response, the engineobtains the appropriate agreements information from the databases viathe backbone 120 for its calculations and compensation functions. Thecommission engine gathers information about agreements from the databasethrough the backbone. The commission engine identifies relevant data inthe database and produces a set of objects for the selling agreementsmodule. Once the engine has processed all the objects, it can generatepayments based on the agreements. The resulting information is stored inthe database for extraction by the DMSS applications.

FIG. 5 provides an illustration of the process flow utilized inaccordance with one or more embodiments of the invention. The figuresshows that the system described above may be utilized to generate theselling agreement that defines a relationship between multiple parties(e.g., step 500). Once the selling agreement is generated the system maydetermine a commission amount associated with a sales transactionperformed by one of the parties based on said selling agreement (e.g.,step 502). However, before the system pays out the commission amount itmay determine if the parties associated with the sales transactionconform to regulatory or business requirements (e.g., step 504). Forexample, the system may determine whether the parties are validlylicensed or authorized to perform such sales transactions. If the secondparty is not validly licensed, the system may reject the salestransaction (e.g., step, 506). Once that determination is performed thesystem may distribute an appropriate payment (e.g., commission amount)to individuals associated with said sales transaction (e.g., step 508).In one embodiment of the invention, the distributed amount takes intoaccount any deductions or credits (e.g., via the payment engine or debtengine) that are to be applied to the commission amount. For example,the person responsible for the transaction (e.g., sales representative)may be paid some amount minus an amount owed.

Computer Execution Environment (Hardware)

An embodiment of the invention can be implemented as computer softwarein the form of computer readable code executed on a general purposecomputer such as computer 400 illustrated in FIG. 4, or in the form ofbyte code class files executable within a Java™ runtime environmentrunning on such a computer, or in the form of byte codes running on aprocessor (or devices enabled to process byte codes) existing in adistributed environment (e.g., one or more processors on a network). Akeyboard 410 and mouse 411 are coupled to a system bus 418. The keyboardand mouse are for introducing user input to the computer system andcommunicating that user input to processor 413. Other suitable inputdevices may be used in addition to, or in place of, the mouse 411 andkeyboard 410. I/O (input/output) unit 419 coupled to system bus 418represents such I/O elements as a printer, A/V (audio/video) I/O, etc.

Computer 400 includes a video memory 414, main memory 415 and massstorage 412, all coupled to system bus 418 along with keyboard 410,mouse 411 and processor 413. The mass storage 412 may include both fixedand removable media, such as magnetic, optical or magnetic opticalstorage systems or any other available mass storage technology. Bus 418may contain, for example, thirty-two address lines for addressing videomemory 414 or main memory 415. The system bus 418 also includes, forexample, a 64-bit data bus for transferring data between and among thecomponents, such as processor 413, main memory 415, video memory 414 andmass storage 412. Alternatively, multiplex data/address lines may beused instead of separate data and address lines.

In one embodiment of the invention, the processor 413 is any suitablemicroprocessor or microcomputer for processing data. Main memory 415 iscomprised of dynamic random access memory (DRAM). Video memory 414 is adual-ported video random access memory. One port of the video memory 414is coupled to video amplifier 416. The video amplifier 416 is used todrive the cathode ray tube (CRT) raster monitor 417. Video amplifier 416is well known in the art and may be implemented by any suitableapparatus. This circuitry converts pixel data stored in video memory 414to a raster signal suitable for use by monitor 417. Monitor 417 is atype of monitor suitable for displaying graphic images.

Computer 400 may also include a communication interface 420 coupled tobus 418. Communication interface 420 provides a two-way datacommunication coupling via a network link 421 to a local network 422.For example, if communication interface 420 is an integrated servicesdigital network (ISDN) card or a modem, communication interface 420provides a data communication connection to the corresponding type oftelephone line, which comprises part of network link 421. Ifcommunication interface 420 is a local area network (LAN) card,communication interface 420 provides a data communication connection vianetwork link 421 to a compatible LAN. Wireless links are also possible.In any such implementation, communication interface 420 sends andreceives electrical, electromagnetic or optical signals that carrydigital data streams representing various types of information.

Network link 421 typically provides data communication through one ormore networks to other data devices. For example, network link 421 mayprovide a connection through local network 422 to local server computer423 or to data equipment operated by an Internet Service Provider (ISP)424. ISP 424 in turn provides data communication services through theworldwide packet data communication network now commonly referred to asthe “Internet” 425. Local network 422 and Internet 425 both useelectrical, electromagnetic or optical signals that carry digital datastreams. The signals through the various networks and the signals onnetwork link 421 and through communication interface 420, which carrythe digital data to and from computer 400, are exemplary forms ofcarrier waves transporting the information.

Computer 400 can send messages and receive data, including program code,through the network(s), network link 421, and communication interface420. In the Internet example, remote server computer 426 might transmita requested code for an application program through Internet 425, ISP424, local network 422 and communication interface 420.

Processor 413 may execute the received code as it is received, and/orstored in mass storage 412, or other non-volatile storage for laterexecution. In this manner, computer 400 may obtain application code inthe form of a carrier wave.

Application code may be embodied in any form of computer programproduct. A computer program product comprises a medium configured tostore or transport computer readable code, or in which computer readablecode may be embedded. Some examples of computer program products areCD-ROM disks, ROM cards, floppy disks, magnetic tapes, computer harddrives, servers on a network, and carrier waves.

The computer systems programs, apparatus, and/or methods described aboveare for purposes of example only. An embodiment of the invention may beimplemented in any type of computer system or programming or processingenvironment. Thus, a method and system for managing distributorinformation is described in conjunction with one or more specificembodiments. The invention is defined by the claims and their full scopeof equivalents.

1. A system for managing relationships between a first party and asecond party comprising: at least one processor; memory coupled to saidat least one processor; said memory comprising a plurality of modulesconfigured to manage distributor information; said plurality of modulescomprising a selling agreements module configured to generate a sellingagreement; said plurality of modules comprising a commission moduleconfigured to determine commission amounts associated with a salestransaction based on said selling agreement; said plurality of modulescomprising a licensing module configured to determine if a partyassociated with said sales transaction has a valid license; saidplurality of modules comprising a payment module for distributingpayment associated with sales transaction to said party 2-64. (canceled)